LONDON, March 7 (Thomson Reuters Foundation) - Scandinavian banks are funding industrial developments responsible for deforestation and violence in the rainforests of Borneo, despite commitments to respect the rights of indigenous forest-dwellers, a campaign group said on Tuesday.

Seven financial institutions have backed mining projects and palm oil plantations that caused rapid rainforest destruction and a human rights "crisis" on the Southeast Asian island, Swedwatch said in a report.

Frida Arounsavath, a researcher for Swedwatch, said banks were failing to ensure that companies they funded acquired meaningful consent from indigenous people before clearing forests where they live.

"These companies have breached indigenous people's rights to be consulted and their rights to keep their traditional forests," Arounsavath told the Thomson Reuters Foundation.

"These forests are at the centre of indigenous people's rights, of their identities, and of their ability to survive as peoples and as cultures."

Indigenous people have faced threats and intimidation, destruction of agricultural land and violent confrontations as a result of deforestation, the report said.

Swedish banks Nordea and Handelsbanken, and insurance company Lansforsakringar welcomed the report by Swedwatch, which monitors the impact of Swedish companies on the environment and human rights.

Stockholm-based Skandia said it would take the findings into account in vetting investments.

But a spokesman for Nordea said the report did not give the "full picture" of the banks' responses.

Borneo - which is shared between Indonesia, Malaysia and Brunei - has lost 19 million hectares of forest over the last four decades, according to a December report by the Center for International Forestry Research.

Just half the island is now covered by forests compared with 76 percent in 1973, it said.

Arounsavath said the most shocking finding was the contradiction between the banks' strong policies on protecting indigenous rights and a lack of systems to check they were implemented.

Many banks have allowed investees and local governments to 'self-report' on rights issues raised by developments, she added.

In many cases, firms list land for development as "unoccupied" or "state-owned" and ignore the ancestral claims of indigenous people, despite commitments to obtaining their 'free, prior and informed consent', the report said.